PoP Balance Sheet – September 2014

Welcome to our September 2014 Balance Sheet!

We use the structure of a monthly income statement and balance sheet in tandem to make sure we are keeping our expenses low and planting our pennies wisely. If you’re not already tracking your finances using these two methods, go to mint.com and get started today! If you have any questions about how we do this just post a comment and we’ll be sure to help!

While we had some good after-tax savings this month (over $7K!) on our income statement, most of that actually got eaten up by losses in our equity portfolio.  With over $400K in various brokerage accounts, and an equity heavy allocation, it takes less than a 2% dip in prices across the board to eat up all those gains and then some.  While that didn’t (quite!) happen this month, we came darned close.  It’s a good reminder – the bigger our holdings get, the less of an impact our month-to-month savings have in comparison to the market swings.

Now, that’s not to be taken as a disincentive to save, but rather just a reminder that we need to get used to feeling the up and down motion of the markets and being okay with it in much the same way that when you get on a boat for the first time you need to get used to the up and downs of the waves.  In that sense, we’re earning our “sea legs” right now.  So far, no need for barf bags or Dramamine.

So for the month of September:

  • Our total assets went down by $0.3K  (oh no!  wrong way!)
  • Our total liabilities went down by $1.1K
  • Net worth rose by $0.8K
  • Total net worth as of the end of September is $787.1K, which represents a measly 0.10% increase this month.

And for the details…

dyerware.com


Assets

Stock Accounts

  • 401K accounts: $208.9
  • Roth IRA accounts: $146.0
  • HSA account: $7.9
  • Taxable Brokerage Accounts: $45.3
  • Total Stock Accounts: $408.1

Real Estate (based on current market comparable sales)

  • Primary Residence $215
  • Investment Duplex: $130
  • Investment Residential Land: $80
  • Total Real Estate: $425.0

Cars (values from Kelly Blue Book)

  • Car 2: $9.2
  • Total Cars: $9.2

Cash Holdings

  • Checking Accounts: $10.3 – need to move another $1K into taxable
  • Savings/Money Market Accounts: $19.0
  • Total Cash Holdings: $29.3

Total Assets: $881.6

Liabilities

Real Estate Loans

  • Primary Mortgage: $94.2
  • HELOC on Investment Duplex: $0.0 (re-advanceable)
  • Personal Loan – Used to Purchase $50K Duplex: $0.0
  • Total Real Estate Related Loans: $94.2

Revolving Credit

  • Credit Card Balance: $0.3
  • Total Revolving Credit: $0.3

Total Liabilities: $95.6

Net Worth = Assets – Liabilities

Net Worth = $787.1, up 0.10% from August

 

Tracking Investable Asset Growth

This first graph shows the growth of our investable assets (net of any liabilities against them), and shows the distribution of the various equity classes we hold. Pretty self explanatory.

dyerware.com


How Many Years Of Spending Do We Have Saved?

Here I’ve taken the total of our investable assets for each month and divided it by the expenses (excluding our investment property expenses) for that month. The idea being that this shows how many years we could live off of those assets at that rate and gives us a better idea of what lifestyle inflation (or intentional deflation) can do to the relative value of our savings.

dyerware.com


It fluctuates in a much bigger range, because in high spending months (like February 2013 when we spent almost $7K paying off our car completely), the denominator is so much bigger. Because of that, it’s the overall trend we’re looking for.

Early Retirement Locale Index

Mr PoP wanted one more way to understand more viscerally how much we have in “investable assets”, so we’ve come up with what we’re calling our Early Retirement Locale Index. The basic idea is that we know how many years of savings we have at our disposal if we were to continue living in south Florida. (That’s the chart above.) But using the “magical” 25 years of savings necessary for early retirement, where would we have to move so that our current investable assets would cover 25x our COL adjusted current spending? (Note, this is purely for fun, we’re not intending to move. Don’t worry Mama & Papa PoP!) If you want to follow along, we’re using this Cost of Living Index from Expatistan, and using the average of the two big cities in south Florida on the list (Miami and Tampa) as our current COL index, which gets us 162. Our city isn’t on their full list, hence the average – but maybe yours is. Then we’re solving this equation:

Current Years Saved/ 25 = COL Early Retirement Locale / COL S. FL

12.75/25 = COL Early Retirement Locale / 162

COL Early Retirement Locale = 82.62

… which puts us in Skopje, Macedonia.

Skopje is the capital of the Republic of Macedonia and is rich with history, having been continuously occupied by various cultures for over 4,000 years.  However, it’s also been destroyed by earthquakes a couple of times, most recently an earthquake in 1963 that destroyed 80% of the city, so there is little left standing that was built by these historical occupants. Tendency toward natural disasters aside, it looks like a pretty neat city, and at 500K people sounds like it could be pretty easy to get to know.

That said, I have to admit I’m biased against Macedonia.  I traveled by train with friends from Serbia to Greece (via Macedonia) in the early 2000s, and when the train stopped at the border of Macedonia around 2am, all of the US citizens were ushered off the train by men carrying large guns and forced to pay for exorbitant fees “for transit visas” that weren’t actually needed and didn’t seem to appear in our passports even after paying the prices (around $30 per US passport) demanded by the large men with guns.  So yeah… that wasn’t Skopje (since Skopje’s not a border town), and it was over a decade ago, but it still left a bad taste in my mouth when it comes to Macedonia, so I don’t think we’ll be going to Skopje anytime soon.

  • January 2014 – Delhi, India
  • February 2014 – Quito, Ecuador
  • March 2014 – Kiev, Ukraine
  • April 2014 – Chiang Mai, Thailand
  • May 2014 – Madras/Chennai, India
  • June 2014 – Colombo, Sri Lanka
  • July 2014 – Bangalore, India
  • August 2014 – Yerevan, Armenia
  • September 2014 – Skopje, Macedonia

How was your balance sheet in September? Where would your savings land you today?

8 comments to PoP Balance Sheet – September 2014

  • I’m in Bhaka, Bangladesh this month, a minor improvement from August!

    I love the contrast of your $800 net worth increase and your $7k to savings. My savings rate still has far more of an impact on my net worth than the stock market does. I would need to have a lot more in investments for them to lose $100k in a year!
    Leigh recently posted..September 2014 net worth update (+0.1%)My Profile

    • It’s a “problem” you’ll have sooner than you think with the way that you are saving. Though your focus on reducing your mortgage over a taxable brokerage should reduce your volatility a bit, too.

  • Not your best month, but you guys are great at keeping it in perspective. Seeing those decreases is hard! It just goes to show you the power of reducing expenses and putting money into savings!
    Gretchen recently posted..September & October GoalsMy Profile

    • The decreases aren’t fun, but it was fun to pick up some shares of VIT this week at a lower price than we had paid in months! So there’s some silver lining. =)

  • I think everyone’s net worth took a hit in September unless you park all your network in cash. Looks like your net worth is gaining steadily which is always nice to see.
    Tawcan recently posted..3 frugal ways to save on electronicsMy Profile

  • I only check our investments quarterly, so I haven’t looked to see where we are with the downturn yet. (That’s later this month.) I did have some money this month to put in my Roth IRA, which was rather exciting. And apparently the market’s down, so I guess I bought my VTSMX on sale!
    Frugal Paragon recently posted..October GoalsMy Profile

  • It stinks to see your net worth go down, but I guess that comes back to the fact that we can’t control the market and just need to ride it out.

    I like your “Early Retirement Locale Index” it’s pretty cool to see how you are progressing as you get closer to the COL of where you currently live.
    Debt Hater recently posted..September 2014 Budget ReviewMy Profile